"Three days before MF Global filed for bankruptcy-court protection, CME Group Inc. [MF Global's direct supervisor] was assured by the New York company of a $200 million cushion in accounts that ensured customer funds were being kept separate from the firm's own money," they write.

"But the customer accounts actually were in the red."

Meanwhile, the trustee group that is concurrently investigating MF Global's collapse issued a report this morning suggesting the company's strategy changed significantly when John Corzine took over in 2010

"With With Mr. Corzine at the helm, dramatic changes ensued, including changes in personnel, lines of business, and markets into which MF Global expanded its business," the report states.

"Significant personnel changes accompanied the new strategic plan.

"In the first quarter of fiscal 2011, MF Global planned to reduce its workforce by 10% to 15%. This reduction included nearly all of the personnel in certain departments, such as Compliance, which were then rebuilt from the ground up by Global Chief Compliance Officer Tracy While."

The report also notes tensions between the company's Chicago office, which was responsible for approving trades, and the New York division, which was executing them.

"Although MFGI's [futures commission merchants] and securities businesses had merged in 2007, in many respects MFGI continued to operate as two separate businesses, marked by a tangible disconnect between employees in Chicago and New York, which was exacerbated by the fragmented chain of reporting.

"While the Treasury Department based in Chicago had the responsibility for funding liquidity for the various lines of non-FCM business based in New York, there was limited communication regarding the basis for requests for intraday funding or the intended or actual use of funds.

"Individuals in Chicago were increasingly frustrated that the FCM was being used to fund the non-FCM business, and were particularly concerned that there was no transparency as to where the funds were going once they left FCM.

Finally, the report gives JP Morgan two more months to negotiate or face litigation to turn over any other funds it may owe.

"JPM has cooperated with the Trustee's investigation, and the Trustee has announced publicly that he is engaged in active discussions with JPM with respect to transfers that the Trustee believes may be voidable or otherwise recoverable. In the event these discussions do not result in an agreement within the next 60 days, the Trustee, if appropriate, will commence litigation."